Exam 1: Managerial Accounting and Cost Concepts

The salary paid to the production manager in a factory is:

Which of the following costs is often important in decision making,but is omitted from conventional accounting records?

Slappy Corporation leases its corporate headquarters building. This lease cost is fixed with respect to the company's sales volume. In a recent month in which the sales volume was 20,000 units, the lease cost was $482,000. -To the nearest whole dollar,what should be the total lease cost at a sales volume of 16,900 units in a month? (Assume that this sales volume is within the relevant range. )

The following costs should be considered by a law firm to be indirect costs of defending a particular client in court: rent on the law firm's offices,the law firm's receptionist's wages,the costs of heating the law firm's offices,and the depreciation on the personal computer in the office of the attorney who has been assigned the client.

The salary of the president of a manufacturing company would be classified as which of the following?

Gabruk Inc.is a merchandising company.Last month the company's merchandise purchases totaled $88,000.The company's beginning merchandise inventory was $15,000 and its ending merchandise inventory was $13,000.What was the company's cost of goods sold for the month?

In order for a cost to be variable it must vary with either units produced or units sold.

Management of Mcentire Corporation has asked your help as an intern in preparing some key reports for April. Direct materials cost was $64,000, direct labor cost was $47,000, and manufacturing overhead was $75,000. Selling expense was $15,000 and administrative expense was $44,000 -The conversion cost for April was:

Management of Modugno Corporation is considering whether to purchase a new model 370 machine costing $441,000 or a new model 240 machine costing $387,000 to replace a machine that was purchased 7 years ago for $429,000. The old machine was used to make product M25A until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 240 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product M25A. Management also considered, but rejected, the alternative of simply dropping product M25A. If that were done, instead of investing $387,000 in the new machine, the money could be invested in a project that would return a total of $430,000. -In making the decision to invest in the model 240 machine,the opportunity cost was:

Conversion cost consists of which of the following?

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: -The best estimate of the total variable manufacturing cost per unit is:

Last month,when 10,000 units of a product were manufactured,the cost per unit was $60.At this level of activity,variable costs are 50% of total unit costs.If 10,500 units are manufactured next month and cost behavior patterns remain unchanged the:

Laco Company acquired its factory building about 20 years ago.For a number of years the company has rented out a small,unused part of the building.The renter's lease will expire soon.Rather than renewing the lease,Laco Company is considering using the space itself to manufacture a new product.Under this option,the unused space will continue to be depreciated on a straight-line basis,as in past years. Direct materials and direct labor cost for the new product would be $50 per unit.In order to have a place to store finished units of the new product,the company would have to rent a small warehouse nearby.The rental cost would be $2,000 per month.It would cost the company an additional $4,000 each month to advertise the new product.A new production supervisor would be hired to oversee production of the new product who would be paid $3,000 per month.The company would pay a sales commission of $10 for each unit of product that is sold. Required: Complete the chart below by placing an "X" under each column heading that helps to identify the costs listed to the left.There can be "X's" placed under more than one heading for a single cost.For example,a cost might be a product cost,an opportunity cost,and a sunk cost;there would be an "X" placed under each of these headings on the answer sheet opposite the cost. *Between the alternatives of (1)renting the space out again or (2)using the space to produce the new product.

Emilio Corporation reports that at an activity level of 3,400 units, its total variable cost is $59,058 and its total fixed cost is $101,150. -What would be the total variable cost at an activity level of 3,500 units? Assume that this level of activity is within the relevant range.

Electrical costs at one of Vanartsdalen Corporation's factories are listed below: Management believes that electrical cost is a mixed cost that depends on machine-hours.Using the high-low method to estimate the variable and fixed components of this cost,these estimates would be closest to:

When a decision is made among a number of alternatives,the benefit that is lost by choosing one alternative over another is the:

A partial listing of costs incurred at Backes Corporation during November appears below: -The total of the period costs listed above for November is:

At an activity level of 5,300 machine-hours in a month, Clyburn Corporation's total variable maintenance cost is $114,268 and its total fixed maintenance cost is $154,336. -What would be the total variable maintenance cost at an activity level of 5,600 machine-hours in a month? Assume that this level of activity is within the relevant range.

Blore Corporation reports that at an activity level of 7,300 units,its total variable cost is $511,803 and its total fixed cost is $76,650.What would be the total cost,both fixed and variable,at an activity level of 7,500 units? Assume that this level of activity is within the relevant range.

At an activity level of 4,400 units in a month,Goldbach Corporation's total variable maintenance and repair cost is $313,632 and its total fixed maintenance and repair cost is $93,104.What would be the total maintenance and repair cost,both fixed and variable,at an activity level of 4,600 units in a month? Assume that this level of activity is within the relevant range.